How to scale image to fit the container?

Change the height and width to max-height and max-width. The image won't be any bigger than it's parent.

.thumbnail img {
    max-height: 100%;
    max-width: 100%;
}

Updated Fiddle

.thumbnail {
    height: 100px;
    display: table;
}

.thumbnail img {
    height: 100%;
    width: 100%;
    display: table-cell;
    vertical-align: middle;
}